Choose the right distributor for your company
When a company is planning to open up a new market, working with a distributor is a very commonly used way. This is due to their many advantages such as easy orders, post-sales service, stored products, and simplified payments, as well as, the opportunity to ensure everything necessary to sell the products in the potential market (both logistics and staff), without the need for high investment.
Nonetheless, we have to keep in mind that this structure will belong to your partner, and you won’t be able to control the strategy or implement your marketing policy. Accordingly, it is essential to choose the right partner and consider which will be the contract terms.
What shall you bear in mind before start working with a distributor?
1. Basic information: You must look for some basic information about your potential partner in order to know the background, which products and brands are being represented, the clients’ profile, size of the company, sales structure, salesforce profile, logistics and warehouse capacity, and after-sales service capability.
2. Referrals: Once you have collected the basic information, you need to ask for referrals in order to know your potential partner’s reputation. Then you will be empowered to assure you are going to be paid and he will give good credit to your products. Visiting the offices that your possible ally has at the place he has to represent you is also another way to value him in a subjective manner.
3. Business plan: It is important to request your partner, not just the basic information, but also a business plan proposal. It must contain the sales strategy, business goals, likely used resources, etc. With this business plan, you will be capable of determining if your business interests meet or not.
4. Exclusive and non-exclusive agreements: There is no specific way to determine whether to agree on an exclusive or non-exclusive agreement. But you can question the following subjects, which will be an aid to your decision.
Can a single distributor handle all the areas?
When talking about a big market, you shall work with several distributors that cover the different areas.
Which type of products are we trading with?
In case you commercialize standard products, an exclusive agreement is not that important, but it is when talking about branded products or unique features.
What is the common practice in my industry?
To check what the competitors in your industry are doing, it is sometimes a good idea to check the competitors in your industry
Can a single distributor handle all my potential customers?
To not miss business opportunities, we must guarantee that our business partner has a strong salesforce, which might cover all your potential customers.
Working with exclusive agreements means leaving 100% of the distribution in a foreign market to a single company. This company could fix high prices and could not cover all the potential customers. But If we make sure that it is loyal and capable of covering the whole market, an exclusive agreement means commitment and investment, minimum stock order, scheduled shipments, and thereby, more stability.
After checking all these features, and if your partner has shown you the capacity to adapt, market experience and rapport to your business values and culture, it means you are ready to start working with the chosen distributor, ensuring a successful market entry.
In our case, from FD Country Managers we offer the distributor service for international companies to sell their product in the Spanish market. Thanks to more than 100 years of experience as Country Managers we have developed expertise in these sectors: Textile, nonwovens & composites. Inspection, Quality Control and NDT (Non Destructive Testing). Industrial equipment, components and machinery. Raw materials for composites.Extrusion, lacquering and anodizing of aluminum. Packaging and packing. Industrial cleaning. Sustainability and the environment.
Contact us for more information.